Gold starts to drop again

Gold turned lower on Tuesday after rising to a one-week high on bargain-hunting in the previous session, while more gold outflows from exchange-traded funds summed up investors’ weakening confidence in the metal.

Investors await Chinese manufacturing data for further indications of the growth outlook for the world’s second-largest economy, which is also the second-largest consumer of gold after India.

Gold fell $US4.63 an ounce to $US1420.51 by 0021 GMT. The metal, which has slipped more than 15 per cent this year, posted its biggest-ever daily loss in dollar terms last Monday, shocking investors who have used gold as protection against inflation and other market risks

US gold futures for June delivery stood at $US1420.20 an ounce, down $US100. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.63 per cent to 1104.71 tonnes on Monday from 1123.06 tonnes on Friday. The holdings were at their lowest since early 2010.